A "Leftist Populist" Is About To Become President Of Mexico: Full Elections Preview

Mexico - where over 100 politicians have been killed in the past year - will hold its general election on July 1, electing a new president, 128 members of the Senate and 500 members of Congress, while local elections will also be taking place in 30 of 32 Mexican states. Recent polling overwhelmingly suggests that the Latin American country will be the latest domino to fall to the global anti-establishment wave, and will elect its first "leftist populist" - some say socialist president - in a generation with potentially far-reaching consequences for the country’s oil industry, trade policy, crime fighting and relations with the United States.

Here are the main highlights of what to look for tomorrow courtesy of RanSquawk:

  • Presidential race is widely expected to be won by Andrés Manuel López Obrador of the MORENA party
  • Key battle grounds expected to be in the Lower House and Senate
  • Relief rally in MXN expected should a “pragmatist” tone be struck, otherwise probabilities for a “post-election sell off [are] high" according to Wall Street analysts

The Preliminary election result program (PREP) begins reporting vote counting at 2100EST/0200BST, with updates every 20 minutes, and preliminary results expected about midnight EST. Conteo Rápido will be providing estimates throughout the day of voting, based on a sample of 7,700 houses. Legally recognised results are not confirmed until the 4th July when the official computing takes place.

VOTING SYSTEM

Presidential candidates in Mexico follow a “relative majority” system for seats, wherein the winning candidate is the one who polls more than other candidates within the voting (Note: doesn’t necessarily implicate a majority). Two systems are used for congressional elections, where 300 members of congress in single-member constituencies are elected through a “first past the post” voting system, with the remaining 200 elected through proportion representation. Senate members are also elected through 2 different systems, with 96 members of 32 3-seat constituencies based on state elections, and the remaining 32 are elected through proportional representation.

COALITIONS & CANDIDATES

Andrés Manuel López Obrador - Juntos Haremos Historia (MORENA, PT & PES) - Andrés Manuel López Obrador (AMLO) has run on a populist platform of economic reform that has been underlined by a desire to freeze prices of gasoline in Mexico for 3 years, as well as a reduction of external investment in the energy sector. He has also suggested an increased level of social spending that will be funded by increased debt issuance.

NOTE: AMLO is also known to be a “flip-flopper” on policy, with regular policy stance changes throughout his campaign. The coalition formed exemplifies this, as it is comprised with the PES party that has stated the alliance is “strictly electoral” and they are likely to vote differently to AMLO’s MORENA party in the future as “[their] convictions are different from [MORENA’s]”.

AMLO ran for president in 2006 and 2012 but lost both elections, first to Felipe Calderon, then to Enrique Pena Nieto on both occasions by slim margins. This year, Lopez Obrador hopes to ride the wave of anti-government anger over corruption, rising violence and tepid economic growth.

José Antonio Meade - Todos por México (PRI, PVEM & Nueva Alianza) - Meade will be the candidate of the most economically favourable coalition Todos por México, with centrists PRI the most popular party within the coalition. Meade will be replacing the incumbent President Nieto, and the party has been judged to be a market positive as it offers fiscal continuity to a growing economy.

Ricardo Anaya - Por México al Frente (PAN, PRD & MC) - Anaya will head the Por México al Frente coalition and is the current President of the PAN party. The right leaning PAN party is an advocate for privatisation and advocates free enterprise and thus free trade agreements (market positive for the NAFTA deal).

KEY ISSUES (via Reuters):

 

POLLING

Considering the widely expected victory for AMLO in the Presidential race, with most polls suggesting the left-wing candidate will have a double-digit lead over his competitors, the main battle ground will be the Lower House and Senate. ABN AMRO and Barclays have both set their expectations >80% for the Lower house to be led by Juntos Haremos Historia.

The senate race will be the most disputed, with both ABN AMRO and Barclays expecting AMLO’s coalition not attaining a simple majority, with Barclays saying: “this chamber would become the main institutional balance against potential radical changes. For example, the Senate needs to approve the indebtedness ceiling, all the laws and appointments.”

At the moment, MORENA leads the Senate race in 20 out of 32 states and is in second place in five states. Should they win in 24 states, come in second place in 4, and AMLO wins with 45% of total votes, they will have 70 seats in senate out of a possible 128. Whilst this will be the least market friendly possibility as it will allow for a more conciliatory sitting in the senate with a simple majority. ING have stated that the 2/3rd majority required to pass reform with resistance is an unlikely possibility, however, with the MORENA government likely having to rely on defections and other left-leaning parties to pass legislation.

MARKET IMPLICATIONS

ING have suggested that if AMLO takes control of both the presidential seat and majorities in both houses by a large margin, the current sell off being seen in Mexican assets could deepen. This is associated with fears on lowering checks on increased spending. Whilst this may provide a short-term boost to growth this will likely be mitigated by potentially increased interest rates after a faltering budget picture post-increased social spending with debt issuance, as according to Christopher Dhanraj of BlackRock. Alongside this he has highlighted negative potential effects for inflation.

A dampener may have been put on these worries, however, with AMLO’s recent commentary suggesting that spending will be maintained at current levels, as well as supporting a free-floating MXN and work towards a NAFTA deal.

Significant concerns have been expressed about possible barriers to entry in the Mexican energy sector with suggestions that private investment could be halted, and subsidies increased in gasoline (as well as food). This has the intention of freezing gasoline prices for “3 years” post-election, but has found opposition from Mexico’s Energy Minister, whom has said that a better method must be found to avoid price spikes.

Due to this, short-term focus has been placed on AMLO’s commentary post-election with Barclays expecting a “pragmatic” AMLO initially so as to “to avoid facing unnecessary pressure from markets”. Should this possibility materialise SocGen expect a “relief rally” to ensue for the MXN on the short term, otherwise ING state that probabilities for a “post-election sell off [are] high”.

NAFTA is often stated as the main medium/long-term focus, with Aberdeen Asset Management’s Stanners expecting USD/MXN to go past 22.0000 should Trump pull-out of NAFTA, but with the potential for a move toward 17.0000 should the AMLO Government have a more moderate tilt and manage a successful NAFTA renegotiation.

Comments

macholatte Sat, 06/30/2018 - 15:30 Permalink

 

How Men Turn Into Women   

     Would you believe this about our favorite summer beverage ?   

        Shocking!

        This is alarming  & scary stuff!

         Beer contains female hormones! Yes, that's right, FEMALE hormones!

Last month, Montreal University scientists released the results of a recent analysis that revealed the presence of female hormones  in beer.

Men should take a concerned look at their beer consumption.

The theory is that  Beer contains female hormones (hops contain Phytoestrogens) and that by drinking enough beer, men turn into women.

To test the theory, 100 men each drank 8 large drafts of beer within a one (1) hour period. It was then observed that 100% of the test subjects, yes, 100% of all these men:-

1) Argued over nothing.

2) Refused to apologize when obviously wrong.

3) Gained weight.

4) Talked excessively without making sense.

5) Became overly emotional

6) Couldn't drive.

7) Failed to think rationally, and

8) Had to sit down while urinating.

     No further testing was considered necessary!

 

MK ULTRA Alpha the artist Sat, 06/30/2018 - 19:37 Permalink

Get ready for an invasion of human waves of dirt poor starving low skilled communist which will cost in the billions for decades. This communist leader has declared it is a God given right for people from all over the world to cross the border illegally and settle in the US. Considering the entire state of California has put out the welcome mat, I expect the invasion will concentrate on California.

He supports illegal immigration from Central America through Mexico to take advantage of catch and release. There will be no way to remove over 30 million and counting in the US now. Mexico wouldn't take them back, especially after the Wall is built and they wouldn't be able to try again.

The Lt Governor of Texas recently said the 11 million number is incorrect, the correct number is 25 million to 30 million illegals in the US. I have said that many times and I believe it's over 30 million. Since 2001, 63,000 Americans have been killed by illegals. Over a similar time frame, over 58,000 Americans were killed in Vietnam.

The Chinese and some other countries refuse to take their people back. It's an incredible costly endeavor for the people of this country to pay for illegal immigration. The Democrats want Open Borders, and Soros is funding the movement in the US and Europe with billions.

It'll be like World War Z if we don't get the Wall. Remember the Zombies swarming at the wall? We need the Wall now.

 

In reply to by the artist

the artist MK ULTRA Alpha Sun, 07/01/2018 - 03:41 Permalink

Listen MK, I totally get it. Which is why I preach the gospel of cleaving off the far right and far left and forming a big tent around the tenets of civic nationalism. 

We need to forget our differences when it comes to the bullshit divide and conquer issues such as...

1. Open borders...fucking build the wall already

2. 2A- "Shall not be infringed...period

3. Global warming tax slavery...fuck that scam, its always been about clean water and air etc. 

4.  Overturn of R v W...not going to happen and it should be decided by the states. 

5. gay marriage...nobody cares. Not worth trading this issue for any of the above

6. Endless needless wars. Enough already

7. Free Speech - an idea who's time has come. The future of politics is the Wild West. If you don't like it, shut up or move. 

8. War on Drugs....failed, bankrupt, idiotic. 

9. Dismantle the Welfare State

10. Return to sound economic principles

Half these issues I don't necessarily identify with or agree with but they are not worth bickering over and letting the Marxist invasion happen. I believe the Left feels the same way, that they would trade our issues for what is important to them. 

 

 

In reply to by MK ULTRA Alpha

mkkby Buck Johnson Sat, 06/30/2018 - 16:15 Permalink

A narco state on our southern border.  Thousands of politicians murdered.  Obviously all these guys have to bow down to them or be assassinated, along with their families.

Trump should offer to send our military in to help them clean out the trash and restore law and order.  That is what a friend does.  After that refugees might want to live in their own country.  No way you can have a normal economy/society with thugs running around unimpeded.

With a narco state on your southern border you need a wall and the army guarding it tightly.

In reply to by Buck Johnson

Malleus Maleficarum mkkby Sat, 06/30/2018 - 18:17 Permalink

A great example of 'conservative small-government solutions' and the rabid uni-party craving for foreign interventionism and blood lust instead of cold, rational fact-based analysis. Same crap we see from the left, just with different excuses. It's truly hilarious how 'conservatives' worship the military, but have never served and/or are first in line to thoughtlessly volunteer them to go die in some Third World shit hole for nebulous 'feel-good' reasons having little or nothing to do with defending American soil or the Constitution. 

Besides, what makes you think our government/military/PMCs aren't already operating in Mexico under various security agreements? DHS, DEA, CAG, the Marines, the Coast Guard and a handful of PSYOP/Civil Affairs detachments cannot fix this problem. So instead of wasting still more American money and blood in a country where we're despised, maybe Trump could do the one and only thing that no politician in the last 100 years has had the balls or brains to do: remove the profit motive! Then, secure the border and send the illegals back to fix their own country! If we 'must' pay to rebuild someone else's nation, it'd probably be more cost effective to send the Mexicans home and just give them the money we spend annually on our failed Prohibition for a few years. It's their home after all, and nobody cares more about it or will do a better job of fixing it. 

Some of us simply refuse to learn the simple socioeconomic lessons of Prohibition. It's no mere coincidence that Al Capone and La Cosa Nostra grew explosively in the 1920s. We cannot spend, arrest, invade or kill our way out of this problem. The Drug War is the primary reason Mexico has changed so dramatically for the worse over the last 50 years. Policymakers refuse to acknowledge repeated and exorbitantly costly failure, while insisting on repeating the same tired, failed strategies and tactics that have never worked and never will!

In reply to by mkkby

Lea mkkby Sat, 06/30/2018 - 18:18 Permalink

If Mexico is a narco state, it is the result of decades of ceaseless US meddling.

So for Heaven's sake, DON'T try to help Mexico any more, right? Clean out your own trash at home (that's to say your Congress) and when you're done cleaning out your corruption - after the thousand years it will take you - you can ask your elders and betters, older and wiser countries than yourselves, to help you build a proper country for your population.

Until then, mind your f... ing business.

In reply to by mkkby

Pernicious Gol… Lea Sat, 06/30/2018 - 18:55 Permalink

México was a catastrophe even before the drug wars. Any completely corrupt system in which nobody gets ahead except by paying for the privilege chupar la verga del patrón is always a catastrophe. That's why desperate Mexicans come to the US for work. They know it's possible to get ahead in the US and impossible in México.

In reply to by Lea

Pernicious Gol… booboo Sat, 06/30/2018 - 17:16 Permalink

Watch Mexican TV. All the heroes are pure Europeans. The heroines are all blondes. The servants and underlings are mestizos. The villians are often pure Indians. Every commercial break begins and ends with a commercial extolling the wonders of the State. Mexican TV is designed to keep the mestizos and indians in servitude to their European ancestry masters.

In reply to by booboo

Endgame Napoleon CheapBastard Sat, 06/30/2018 - 17:58 Permalink

Good luck to all of the American-owned, cheapskate businesses down there that just could not invest in their own country, with its racially diverse workforce that needs higher wages to cover rent unless they have spousal income or 100%-free, unearned income for womb productivity in single-earner households from government welfare programs and the progressive tax code. American-owned companies prefer a racially homogenous workforce, like the one in Mexico, and they like to skip out on paying into the SS-retirement fund that citizens pay into at either 7.65% or 15.3% of every dime earned up to the $128,400 cap. The SS-retirement fund is no longer running surpluses; one reason why is all of the offshoring of jobs and potential SS contributions to countries like Mexico. The lefty governent down there will likely come up with new ways for American-owned companies to pay into the welfare system for the Mexican citizens who are in Mexico, rather than working under-the-table and for enough traceable income to stay under the income limits for welfare for US-born kids here in the USA.

In reply to by CheapBastard